SMIC maintains top credit rating for P47.3-B bonds

SM Investment Corp., the listed holding firm of the family of tycoon Henry Sy, maintained its top credit rating of PRS Aaa from the Philippine Rating Services Corp. for its P47.3 billion outstanding bonds.

Obligations rated PRS Aaa are of the highest quality with minimal credit risk. The issuer’s capacity to meet its financial commitment on the obligation is extremely strong.

PRS Aaa is the highest rating assigned by the local credit watcher.

The ratings reflect SMIC’s solid financial profile, backed by ample liquidity and a sound capital structure; core businesses with leading market positions, sustained earnings and recurring cash flows, and progressive growth strategy.

“SMIC’s liquidity has been robust and is expected to remain as such, supported by recurring revenue streams from the SM Group’s growing malls, office and hotel portfolios. Internally-generated cash will remain positive, and also the main funding source for the forecast period 2018-2019,” PhilRatings said.

“Historical debt levels have been very manageable, with debt-to-equity ratio kept below 1x. Capitalization structure will remain sound, with no significant changes in projected leverage measures. Equity growth will be attributable to the plowback of earnings into operations, while debt will post minimal single-digit increases for the projected period,” it noted.

SM Retail is the leading player in the domestic retail market, with its operations considered as the country’s largest and most diversified. As of the end of March this year, SM Retail had 1,674 stores nationwide: 59 SM stores, 53 SM Supermarkets, 186 SaveMore stores, 47 SM Hypermarkets, 46 Walter Mart stores and 1,283 Specialty stores.

Property firm SM Prime Holdings Inc. is one of the largest integrated property developers in the Philippines, with interests in malls, residences, offices, hotels and convention centers, as well as tourism-related property development. Its Philippine malls have an average daily pedestrian count of 3.5 million.

As of end-2017, BDO Unibank was the Philippines’ largest bank based on consolidated resources, customer loans, deposits, assets under management and capital, as well as branch and ATM network. It ended the year with P2.7 trillion in resources, 1,180 branches and 4,022 ATMs.

“The SM Group is expected to continue with the expansion of its core businesses by expanding its business footprint, maintaining a healthy balance sheet, and keeping efficient operations,” PhilRatings said.